Nigerian Treasury Bills Rally after Spot Rates Repricing
The Nigerian Treasury bills rallied in the secondary market after the Central Bank of Nigeria (CBN) spot rates adjustments for 91- and 182-day maturities at the primary market auction on Wednesday.
The lost bids at the main auction conducted on Wednesday filtered into the secondary market on Thursday as investors sought to boost their portfolios.
The market recorded strong interest in the new 1-year (17-Dec-26) bill, which traded as low as 16.90% – 61 bps below the stop rate – during the day before ending at 16.95/16.80; bullish momentum began early in the session.
There was sell pressure on Nigerian Treasury bills that will expire on 19-Feb-2026, resulting in 18-basis-point increase in yield to 17.49%.
Despite the bullish pattern, there was no material repricing observed across the curve, with key papers such as the 19-Mar-26 and 05-Feb-26 bills closing unchanged at 15.24% and 15.15%, respectively.
As a result of increased bargain hunting across the belly and long end of the curve, the average yield on Nigerian Treasury bills fell to 17.5%.
Across the curve, the average yield contracted at the mid (-1bp) and long (-4bps) segments, driven by the demand for the 182 days to maturity (-1bp) and 357 days to maturity (-35bps) bills, respectively.
The market saw investors exiting positions at the belly of the curve. Traders reported that yield expanded at the short end by +2 bps due to sell pressures on 63 day to maturity Treasury bill. Similarly, the average yield contracted by 38 bps to 22.0% in the OMO segment.
At the midweek primary market auction, the Central Bank of Nigeria offered N750.00 billion in bills, with total subscriptions reaching N1.51 trillion, translating to a bid-to-offer of 2.0x.
Eventually, the DMO sold N704.07 billion, translating to a bid-to-cover of 2.2x. The CBN increased stop rates on the 91-Day to 15.50% (Previous: 15.30%) and the 182-Day to 15.95% (Previous: 15.50%), while the stop rate on the 364-Day bill declined to 17.51% (Previous: 17.95%).
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